decreases. The key point to remember on such problems is that each successive increase or decrease is
performed on the result of the previous one.
Here’s an example:
15.A business paid $300 to rent a piece of office equipment for one year. The rent was then
increased by 10% each year thereafter. How much will the company pay for the first
three years it rents the equipment?
A) $920
B) $960
C) $990
D) $993Bite-Size Pieces
Always handle
percentage problems in
bite-size pieces:
one piece at a time.Here’s How to Crack It
This problem is a great place to use bite-sized pieces. You know that the business paid $300 to rent the
piece of office equipment for the first year. Then, you were told that the rent increases by 10 percent for
each year thereafter. That’s a sure sign that you’re going to need the rent for the second year, so go ahead
and calculate it. For the second year, the rent is 300 + = 330.
Now, the problem tells you that the business rents the equipment for three years. So, you need to do the
calculation one more time. At this point, you might want to set up a chart to help keep track of the
information.
Year 1: $300Year 2: $330 = 300 + Year 3: $363 = 300 + To find the answer, all you need to do is add up the costs for each of the three years.